Disciplined spending as tax revenue improves

Ongoing spending discipline and a better than forecast tax revenue have led to an improvement in the Government’s financial statements for the 10 months to 30 April, Finance Minister Bill English says.

Higher corporate tax and GST revenue left core Crown tax revenue for the 10 months $772 million higher than forecast in last month’s Budget. Core Crown expenses were $323 million below forecast.

The operating deficit before gains and losses at $5.94 billion was $1.42 billion better than forecast.

“Over the past year there have been a number of fluctuations in the tax take from month to month,” Mr English says.

“While this month’s tax take has been boosted by better than expected GST and corporate results, revenue is still about $900 million below forecasts in the Treasury’s pre-election update last October.

“These fluctuations in revenue reinforce the need for the Government to keep a firm control on its costs, so it can stay on track to surplus in 2014/15.

"Balancing the books and returning to surplus, along with other policies to build a more competitive economy and sustainable growth, will help rebalance our economy towards savings and exports. That is why it is one of our four main priorities.

"It also helps us deliver on our other three main priorities - building a more productive and competitive economy, delivering better public services within tight financial constraints and rebuilding Christchurch.

"We remain committed to responsibly managing the Government’s finances, while at the same time putting policies in place that support a growing economy, more jobs and better incomes,” Mr English says.